Has Crude Oil Peaked?

According to an online poll conducted by Business Standard, more than 55% people are of the opinion that crude oil prices will float between $60 to $70 per barrel in 2018.

The EIA also forecast that USA output will average 10.6 million bpd this year, enough to continue surpassing Saudi Arabian output.

"Brent crude oil spot prices averaged $69 per barrel in January, an increase of $5/bbl from the December level".

The EIA also forecast US oil demand for 2018 will grow by 450,000 bpd, lower than its previous forecast of 470,000 bpd growth.

Futures fell as much as 0.7 per cent in NY, falling for a fifth day, after government data showed United States crude production jumped to a record 10.25 million barrels a day last week.

But in one of the steepest rises of any oil producer in modern history, USA output has surged by more than 20 percent since mid-2016, undermining OPEC's and Russia's efforts to tighten the market and prop up prices by withholding production.

The report comes a day after the release of the latest Short-Term Energy Outlook that saw the EIA projecting local oil production will hit the 11-million-bpd mark late this year, with the average for the year seen at 10.6 million bpd.

The world's oil industry is turning upside down under President Donald Trump's economic leadership, as the United States is now selling its exported oil in the Middle East to the most unlikely oil-rich buyers.

Most of the crude-oil contracts traded globally are priced in U.S. dollars. The EIA said this year the USA will produce an average of 10.6 million bpd, rising to 11.2 million bpd next year.

"U.S. crude production should keep hitting new highs throughout 2018", Citigroup analysts including Ed Morse wrote in a February 7 note. According to the EIA, 56 percent of China's crude oil imports came from OPEC members a year ago, compared to a peak of 67 percent in 2012.

"Supply looks quite healthy and that's taking the edge off oil prices", said Nitesh Shah, a commodities analyst at ETF Securities in London. The political mayhem involving the royals of Saudi Arabia in November of previous year led to a steep rally in crude-oil prices. According to the Energy Information Administration, crude oil product could hit 9.9 million barrels per day in 2018, which surpasses the prior high reached in 1970 of 9.6 million barrels per day.

"It is, however, worth remembering that global oil demand is set to grow at a healthy rate this year, that OPEC and its 10 non-OPEC peers are impressively disciplined at keeping their quotas and that geopolitics also helps to balance the supply/demand equation", said Tamas Varga, oil strategist.

Crude resumed its decline as growth in US shale output acts as a downside price risk.

The relative performance of the S&P energy index has generally tracked oil prices, but a gap emerged in 2017 as crude prices recovered but shares in energy companies lagged, indicating they are primed to catch up.

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